Residents displacing workers in areas neigbouring Melbourne’s CBD, huge shifts in household composition and the influence of the emerging middle class living in Asian megacities are reshaping Melbourne, as planning policy struggles to keep pace with the changes.

New analysis from The Demographics Group Director of Research, Simon Kuestenmacher, found the number of workers in East Melbourne, West Melbourne and North Melbourne fell between 2011 and 2016, while the number of residents experienced double-digit growth.

Speaking at a lunch hosted by the Property Council today, Mr Kuestenmacher argues that global megatrends were driving changes that will only accelerate in the years ahead.

He forecast moderate neighbourhood growth around transport zones in the middle ring as the future residential development areas.

Mr Kuestenmacher said factors influencing inner-city growth include the housing pattern of new arrivals to the city and that it had been “raining jobs” in Melbourne’s CBD in recent years.

“Migration shapes the geography of the city,” he said. “As a migrant, you might not know the city prior to your arrival, so you move close to your workplace or university. This creates a migrant cluster for the first few years which then traditionally disperses.

“While this is one factor changing the shape of Melbourne, it’s not the only one. Our research has pinpointed with precision a monumental shift in the household composition.

“Since 1986 we have witnessed a major social shift from suburban families to hipster couples and this evolution is forecast to continue.

“In the 50 years to 2036 we are expecting 183% increase in single households, a 150% increase in couple-only households but only a 51% increase in the traditional nuclear family. This of course has a huge impact on the type of housing required in Australia’s fastest growing city.

“At the same time, we are witnessing an explosion in the number Asian mega-cities, with Australia’s future inextricably linked to a growing Asian middle class.

“Growth is going to happen – the challenge for policymakers is how well they manage it.”

Property Council Victorian Executive Director Cressida Wall said the Property Council’s Five Steps to a More Liveable and Prosperous Victoria provides a blueprint for good growth.

“Our priority is accommodating growth in a way that allows Melbourne to maintain its mantle as one of the world’s most liveable cities,” Ms Wall said.

“We can’t ignore the major demographic trends that are altering the shape of our city but we can plan for them and maximise the benefits a vibrant, engaged population can bring with high levels of employment and great transport and infrastructure connections.

“The recently released report by Urbis on the impacts of the government’s C270 controls demonstrates why planning for such trends – whether it's an increased CBD employment concentration or smaller family units – is so vitally important.”

Figure 1: Increase in jobs per suburb 2011-2016

Figure 2: Change in household and family type in Australia over 50 years